Have A Look At The Credit Card Calculator – And Prepare To Be Astonished
Although we all know that it is best to pay off our credit cards in full every month, sometimes it can't be done. Given your own particular circumstances, what is the best way to pay off the cards in order to save as much interest as possible?
The Finance Consumer Agency of Canada has an on-line tool that has the answer. It's called the Credit Card Payment Calculator and it looks at three different payment options:
- Option A: What if you only make the minimum payment each month?
- Option B: What if you make the minimum payment plus an additional amount each month?
- Option C: What if you pay a fixed amount each month?
It calculates how much interest you would pay for each option, given the amount you owe and the interest rate on your card.
The results of a simple calculation are astounding: If you owe $1000 on your card at 18% interest, and you pay a minimum monthly amount of $10.00, it will take you ten years to pay off the card and you will have paid $798.89 in interest!
However, the calculator will show you that there are better options. It can calculate how payment methods B or C (above) can make a huge amount of difference in the amount of interest you will pay and the time it will take to pay the card off.
Educate yourself – take a look.
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